The old retail playbook is no longer an option. Luckily, digital consumers are leaving clues for us to follow.
Cognitive computing is forever changing how we shop.
How? Consider your social media activity.
What did you post on Facebook this week? Twitter? Snapchat? You are sharing your one-of-a-kind digital footprint with the world through images, videos and chats that detail likes, dislikes, emotions and opinions.
Retailers know they can “distinguish themselves by providing value through personalized experiences,” according to the sixth annual UPS Pulse of the Online Shopper study.
It had been impossible to really understand the customer and create an actual one-one-one relationship with them. Cognitive computing technology taps into social media to make this a reality.
Content in context
Traditional means of understanding the customer, using analytics to track behavior and shape the retail experience – whether online or in-store – are unwieldy and largely retrospective.
It’s akin to ambulance chasing: pushing advertisements after an online search. Even worse is receiving a pointless ad for a product you just purchased.
Now let’s go back to all that unstructured data you share with the world. Traditional analytics can only see around 20 percent of overall data – the other 80 percent (the type of data you’re sharing) is invisible.
“Traditional analytics can only see around 20 percent of overall data – the other 80 percent is invisible.”
By tapping into this data to learn, interpret and understand – even reason – cognitive computing opens up a new world of possibilities that retailers are just starting to understand.
In the UK, Shop Direct has transformed itself into a digital department store with more than 1.2 million daily visitors. Its leadership has worked with IBM Watson to deliver a truly personal online experience.
US florist 1-800 Flowers launched its own IBM-Watson-powered concierge service last year to help customers get more tailored results. These are early examples of cognitive computing in retail, and as retailers become more knowledgeable about technological benefits, experiences will become far more intuitive and personalized.
Imagine a world where your needs and wants are identified before you even know what you need. Products – from the mundane items like laundry soap to that umbrella you need after it starts raining at a concert – are available when and where you want them.
The cognitive consumer
This is the new world of the cognitive consumer. Brands must deliver on such expectations. This has significant implications for almost every aspect of a retail business from marketing to supply chain to IT, e-commerce and merchandising.
The traditional retail business model is no longer enough to satisfy today’s customer. Traditional performance indicators like sales per square foot, conversion rates and net-promoter scores aren’t good enough. Now a retailer must intimately understand how their customers feel – and at all times.
It’s worth it. According to research by Deloitte, nearly half of all consumers are “willing to wait longer for a personalized product or service.”
The customer journey has never been so difficult to map. But as we’ve learned, consumers are leaving behind digital footprints. Savvy retailers must follow them.
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